Bank of America: Financial Loser
NEW YORK (TheStreet) -- Bank of America (BAC) was the big loser among the largest U.S. financial names on Tuesday, with shares declining more than 4% to close at $8.54.
The major U.S. equity indices lost ground for a fifth straight session on Tuesday as eurozone worries soured sentiment ahead of first-quarter reporting season.
Meanwhile, U.S. Treasury bond prices continued to climb, with the 10-year bond yield dropping below 2%, for the first time since early March. One veteran Wall Street bond portfolio manager blamed "the rain in Spain" as the yield on 10-year Spanish paper in the open market climbed to 5.94% from 5.74%. A week earlier, Spanish 10-year bonds were yielding 5.43%.
The KBW Bank Index (I:BKX) pulled back over 2% to close at 46.83.
Bank of America's shares have now returned 54% year-to-date, following a 58% decline during 2011.
With the shares dipping 10% over the past week, investors may be looking at a buying opportunity. Bank of America trades for just 0.7 times its reported Dec. 30 tangible book value of $12.95, and for eight times the consensus 2013 earnings estimate of $1.06 a share, among analysts polled by Thomson Reuters.
FBR analyst Paul Miller on Tuesday reiterated a market perform rating on Bank of America, while raising his price target to $9.00, or 0.7 times the analyst's estimated year-end 2012 tangible book value of $13.08, "as the recent foreclosure settlement has eliminated an overhang on shares.
Miller added that "further regulatory clarity coupled with projections that the company can meet the Basel III capital requirement of 7%
Bank of America is slated to report its first-quarter results on April 19. The average analysts' estimate is for a profit of 12 cents a share.
Interested in more on Bank of America? See TheStreet Ratings' report card for this stock.
-- Written by Philip van Doorn in Jupiter, Fla.
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